Very efficient coal-fired power plants will be able to sell carbon offsets under the Kyoto Protocol, in an expansion of project eligibility under the carbon trading scheme, U.N. official Jose Miguez said.

"It was approved," he told Reuters on Friday.

China is set to overtake the United States this year as the world's biggest emitter of carbon dioxide, blamed for global warming, largely because of its rapidly rising coal consumption.

Under Kyoto rich countries can meet domestic greenhouse gas emissions goals by buying carbon offsets from emissions-cutting projects in developing nations, in a scheme meant to cut the cost of fighting climate change.

Until now the scheme had mostly financed projects to install renewable energy like wind, or to destroy powerful greenhouse gases from the chemicals industry and from landfill rubbish dumps, especially in China, India and Brazil.

Under the amended rules, power plants in countries where coal accounts for more than half of all electricity generation will be able to apply, Miguez said.

One industry expert estimated that some 40 power plants worldwide may be able to earn carbon offsets as a result.

"These projects could attract significant amounts of carbon finance," said Greg Dunne, a director at carbon specialists ICECAP.

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